Tech biggie Alphabet’s (GOOGL) Google has been caught in the crossfire of the intensified tariffs war between the U.S. and China. The State Administration for Market Regulation in China announced that it is initiating a probe into Google for allegedly violating the country’s anti-monopoly law. The news came soon after the 10% blanket tariffs imposed by the U.S. on Chinese imports became effective this morning.
Maximize Your Portfolio with Data Driven Insights:
- Leverage the power of TipRanks' Smart Score, a data-driven tool to help you uncover top performing stocks and make informed investment decisions.
- Monitor your stock picks and compare them to top Wall Street Analysts' recommendations with Your Smart Portfolio
The exact nature of the anti-competitive investigation against Google remains unclear at the moment. Notably, Google’s Search and internet services have not been available in China since 2010. Google only has limited operations, such as advertising and its Android operating business in China. Google shareholders are yet to react to the news.
Meanwhile, Alphabet preps to report its Q4 FY24 results after the market closes today. Ahead of the results, GOOGL stock is trending higher by 1.2% in pre-market trading as of writing.
U.S.-China Trade War Takes an Ugly Turn
The Trump administration has sparked off a new and aggressive trade war with China. The latter is hitting back at the U.S. by announcing a new set of tariffs on a slew of American products imported into the country. China’s Finance Ministry announced that the country will impose 15% tariffs on U.S. coal and LNG (liquified natural gas) imports. Additionally, it will increase the tariffs on crude oil, agricultural machinery, and some vehicles. Plus, the Commerce Ministry added several metal and metal-based products that are used in industrial machinery, aerospace, and military applications to the control list.
China’s administration is miffed with Trump’s new tariffs. The country is set to present its opening bid to negotiate with Trump, mainly with the proposal to restore a trade agreement that Beijing signed with the earlier Trump administration in 2020, However, this proposal was never enforced. Furthermore, China is prepared to file a lawsuit against Trump’s new levies at the World Trade Organization (WTO). Commenting on the U.S.’ actions, China said that the U.S. was violating the rules of the WTO and harming normal economic and trade relations between the two countries.
Trump’s Tariffs Have Far-Reaching Effects
Simultaneously, Chinese regulators have also placed PVH Corp. (PVH), owner of Calvin Klein, and American biotechnology company Illumina (ILMN) on the “unreliable entities” list. The administration alleged that PVH and Illumina discriminated against Chinese companies, such as boycotting cotton products from China’s Xinjiang.
Interestingly, Trump has revoked the 25% tariffs on imports from Canada and Mexico for a month after signing separate agreements with both nations. That said, the U.S. president seems to be in no mood to change his strict stance on China, as he believes that Beijing has failed to control the flow of illicit drugs into the U.S.
What Is the Price Target for Google?
On TipRanks, the average Alphabet Class A price target of $219 implies 8.8% upside potential from current levels. Moreover, GOOGL stock has a Moderate Buy consensus rating on TipRanks. This is based on 21 Buys versus eight Hold ratings received in the last three months. GOOGL stock has gained 40.6% over the past year.
